Hotel Shilla's shares saw a significant surge on Thursday, sparking a rally in South Korean tourism stocks. This came as China relaxed restrictions on group travel to more countries, including South Korea.
Hotel Shilla, a prominent hotel chain and duty-free shop operator, experienced a remarkable 17% increase, closing at 86,700 won ($65.99). This marks the largest daily percentage gain since FactSet started keeping records in 1993. Meanwhile, the benchmark Kospi index slightly dropped by 0.1% for the day.
China Reverses Ban
In a positive turn of events, China's Ministry of Culture and Tourism has lifted the ban on group travel to a total of 78 countries. Notable destinations on the list include the United States, Australia, Japan, and South Korea. This move signifies Beijing's third relaxation of such limitations this year, prompting an upsurge in tourism and travel stocks across the region.
Optimism for South Korea
As a result of this development, travel company Hanatour Service and flag carrier Asiana Airlines in South Korea experienced significant boosts. Hanatour Service saw a 10% increase, while Asiana Airlines rose by 9.4%. Expectations are high that Chinese group tourists will soon return to the country.
Notably, large-scale Chinese tour groups have been barred from visiting South Korea since the deployment of a U.S. missile defense system by Seoul in 2017.